Nikola's $2B Lawsuit Against Tesla Days Away From Dismissal: What Investors Should Know

In case you forgot, Nikola Corp NKLA filed a $2 billion lawsuit against Tesla Inc TSLA in 2018 over the similarity in design between the two companies' semi-trucks. The lawsuit could officially come to an end with Nikola ending communication with court officials.

What Happened: In 2018, Nikola filed a lawsuit against Tesla for patent infringement. Nikola accused Tesla of mimicking its design on items like the wraparound windshield, mid-entry doors and aerodynamic fuselage.

Nikola’s lawsuit also said Tesla tried to hire the company’s chief engineer.

Nikola “has dropped the ball and this 2018 action is languishing without explanation or apparent good cause,” Judge James Donato wrote in an order last week, as shared by The Verge.

Nikola now has until Oct. 6, 2021 to show in writing cause for the case to continue and not be dismissed.

Both Nikola and Tesla stopped responding to the Northern District Court of California. The court asked in July and September for responses from the two companies.

Related Link: Trevor Milton Hires Lawyers That Represented Elon Musk, Donald Trump And Sells Nikola Shares

Why It’s Important: Nikola argued in 2018 that Tesla was causing “confusion in the market” by using similar designs in its highly anticipated semi-truck.

Nikola argued for $2 billion in damages for lost sales from Tesla.

Since the lawsuit, Nikola has gone through several changes and highly public negative events. Nikola founder and former CEO Trevor Milton was indicted for fraud in July. Milton was released on a $100 million bond and currently awaits trial.

Price Action: NKLA shares traded at $10.66 on Friday. Shares have traded between $9.02 and $37.95 over the last 52 weeks. Shares of NKLA traded at nearly $80 in June 2020.

Photo: Courtesy of nikolamotor.com